NextEra leaders presented investors with an optimistic view of the company’s future during Friday’s second quarter earnings call.
NextEra Energy Resources added 1,200 MW of new solar energy projects to its long-term queue during the second quarter of 2022, marking the second-largest addition in the company’s history, according to Crews. The majority of those projects, according to Rebecca Kujawa, president and CEO of NextEra Energy Resources, are slated for construction in the 2024-2025 timeframe.
High prices for natural gas and electricity should continue to drive demand for renewable energy even higher, and NextEra, Crew said, is poised to capitalize on the company’s “significant competitive advantages” in the renewable energy space.
NextEra believes renewables “are going to continue to get cheaper and cheaper over time, and gas generation, which we primarily compete against, continues to get more expensive,” Ketchum said. “When I think about gas prices today, we think they’re going to remain elevated over a long period of time ... and that is creating a ton of demand for renewables.”
Ketchum noted that higher natural gas prices allow NextEra to charge higher prices for power purchase agreements, which increases the company’s margins and has allowed them to offset increased interest rates.
Company leaders also expressed optimism about their ability to avert 2 GW of project cancellations put on the table by the solar tariff investigation and short supplies of solar panels. NextEra’s suppliers, Crews said, are expected to use ingots and wafer manufactured outside China within 24 months. Panels made without Chinese wafers are not subject to the Department of Commerce investigation and should remain free of new tariffs regardless of the investigation outcome, he said.
“There is still a path where there are little to no cancellations across the board,” Kujawa said. “But we’re not there yet, there is still some risk.”
But even if the company does see some cancellations this year as a result of the investigation, Kujawa said, she believes the company should have no trouble entering into new contracts to replace them.
Mike Doyle, a senior equity analyst covering utilities for Edward Jones, said that given the evident demand that currently exists for renewable energy, it is more likely that any projects NextEra cannot complete this year will be delayed, rather than canceled outright.
“There’s just a lot of demand and companies want to do these projects and get on the roster to do that,” Doyle said. “For these projects, I think they’ll continue — maybe just pushed back a year in some cases.”
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Utilities and grid operators are facing increasing threats from climate change as well as cyber and physical attacks, and are deploying a variety of responses to meet the rising challenges.
Electric grid operators may struggle with resource shortages, droughts and extreme temperatures this summer, according to North America's grid watchdog.
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